Our Blog

What Is a Living Trust?

A living trust is a legal arrangement that’s established to hold and manage your assets. Living trusts take effect while you are still alive, as opposed to a trust that is established through a will and takes effect after your death.

Living trusts generally involve three main parties:

• The grantor is the person who creates the trust and transfers their assets into it.
• The trustee is the person appointed by the grantor to manage and administer the trust according to its terms. In a living trust, the grantor typically serves as the first trustee and appoints a second trustee to succeed them after their death.
• The beneficiaries are the people who are designated to receive the assets held in the trust according to the trust’s terms and instructions.

Types of Trusts

There are two different kinds of living trusts:

Revocable Trusts

A revocable trust can be modified, amended, or revoked by the grantor during their lifetime. The grantor retains control over the assets in the trust and has the ability to make changes to the trust’s terms and beneficiaries or even dissolve the trust entirely.

Irrevocable Trusts

An irrevocable trust is a trust that, once created, cannot be modified, amended, or revoked by the grantor.

Benefits of Putting Your House in a Living Trust

Including your house in a living trust has numerous advantages:

1. Avoid Probate

Assets held in a living trust typically pass directly to the beneficiaries you’ve designated in the trust document, bypassing the need for probate court proceedings. Probate can be a time-consuming and costly process, so avoiding it can save your loved ones from unnecessary hassle and expenses.

2. Protect Privacy

Unlike a will, which becomes public record during probate, a living trust allows for a higher level of privacy. The distribution of your assets and the terms of the trust can remain confidential since it does not go through the probate process.

3. Retain Control

A living trust allows you to establish detailed instructions for the management and distribution of your assets. It also provides a mechanism for managing your assets in the event of your incapacity. If you become unable to manage your affairs before your death, the successor trustee you’ve designated can step in to manage the trust without court intervention.

4. Potential Tax Benefits

A living trust can be a useful tool for implementing tax planning strategies for larger estates that are subject to estate taxes. While estate tax laws vary depending on the jurisdiction, certain provisions within a living trust may help reduce the tax burden on your estate.

How to Find an Estate Planning Attorney in Fort Myers

Hampton Law offers estate planning services to several locations in Southwest Florida, including Fort Myers, North Fort Myers, Cape Coral, Bonita Springs, Estero, and Sanibel.

Estate planning can be an overwhelming process. At Hampton Law in Fort Myers, our attorneys work with you directly to help you structure your estate and ensure the safe transfer of your assets.

Here at Hampton Law, we keep our clients in-the-know when it comes to important things like a living trust. Learn about what exactly a living trust is and why you need one for estate planning in Fort Myers.

What is a Living Trust?

When we talk about a living trust, we’re referencing a revocable living trust. This kind of trust can be edited or completely revoked by the trustor as long as they are living and competent.

Once the trust is created, all of your assets, including your home, stocks, bank accounts, and more are transferred into it. During your lifetime, the trust is administered for your benefit. When you die, the assets will be transferred to the beneficiaries that you’ve designated in the trust documents.

Do I Need a Living Trust?

Having a living trust is important for any and everyone. In the event of an accident or sudden illness, it will eliminate any unsureness or confusion. It will ensure that your assets are managed in the way you want, and allotted to the designated beneficiaries.

If you and your spouse own a home or have children, you can benefit from a living trust because your assets and heirs can avoid a time-consuming and expensive experience in probate court.

The asset that your living trust holds can be managed by the trustee and distributed according to your wishes without the courts ever becoming involved, or even supervising the process.

Avoiding Probate

If assets under your name are not included in a living trust when you pass away, or they don’t pass ‘beneficiary designation,’ and they surpass a certain amount of value, those assets could be subject to probate. Probate is a process supervised by the court that handles transferring assets to beneficiaries listed in a person’s will.

After the event of your death, a petition is filed with the court and a hearing is held. The process concludes when the court approves a final distribution of your assets. Probate takes much more time than property distribution related to a living trust, and assets may get tied up in probate in a manner they wouldn’t in a living trust.

A Living Trust Attorney Near Me

Estate planning in Fort Myers is important. Hampton Law specializes in estate planning and elder law, and we would be more than happy to help you figure out your living trust. Contact us today to get the ball rolling.

Losing your original estate plan documents certainly is an issue, but not an unsolvable dilemma. The first thing you should do is contact your estate planning attorney and see if they saved electronic copies of any or all your documents. (At Hampton Law, we scan all our clients’ documents on the day of signing, so that we can easily email them to you upon request.) However, not all law firms do this.

Other than re-signing your documents, Florida law provides several options for addressing the issue of missing or damaged original estate plan documents.

According to Florida Probate law an original Last Will and Testament needs to be submitted to the court upon death. Therefore, the Last Will and Testament is the one document Hampton Law recommends re-executing as soon as possible.

An electronic copy of a Trust document should be sufficient for any purpose. If you have electronic copies, you should be okay to use these. Otherwise, you’re welcome to have an attorney restate the Trust in its entirety so that you have a hard copy. Because you’re simply restating the Trust, you can also continue to use the original Trust date.

The Durable Power of Attorney is the most important document you have, and Florida law provides that an electronic copy has the same effect as a physical copy. A Designation of Healthcare Surrogate (sometimes called a Healthcare Proxy) and a Living Will should also be fine in electronic copy form.

If you choose to use a copy of the Durable Power of Attorney or Health Care Surrogate, I suggest a notary public from the law firm that drafted your estate plan documents sign a Certification as Notary Public that the document is a true and exact copy of the original.

Before utilizing a copy of your estate plan documents, always consult with your attorney to make sure that these will be valid and accepted according to Florida Law when needed.

Did you know that August is National Make-A-Will Month? Although most Americans recognize the importance of estate planning, it is estimated that 50-60 percent do not have a will. If you do not yet have an estate plan, now is the time to act!  Remember that even if you set up a revocable trust as part of your estate plan, you still need a will.

Why is it Important? 
The entertainer known as Prince, or the Artist formerly known as Prince, died at the age of 57. Since he did not establish an estate plan before he passed, there was no decision or designation as to how is fortune should be divided. Prince’s estate is still tied up in legal battles five years later!  Not having a will can lead to family disputes, costly litigation and legal fees. Having your final documents in order before it’s too late is an expression of love and compassion for your family and friends. Don’t we keep reminding you to ‘Plan Now for Peace of Mind Tomorrow’?

Think Estate Planning is Only for the Wealthy?
A person’s wealth or assets will determine how detailed their estate plans may need to be, but everyone should have a plan in place. From selecting guardians for your children or who will act as the executor of your will, to who will inherit your most treasured items, a will is an important document that stipulates your desires upon your passing. Without it, your preferences are unknown and may not play out the way that you’d want them to. Think of a will like a genie in a bottle, making sure your wishes come true.

Most people cite not having time, not wanting to think about it, or simply not getting around to it as reason for not having a will.  With this month being National Make-A-Will Month, there is no better time to act than now.　　　

Regular Revisions
If you already have a will – congratulations! You are better prepared than more than half of Americans. While estate plans never expire, we know that life happens – births, marriages, deaths, and other important family changes. Everyone should review their will annually and make necessary revisions. This is also why a will isn’t just for someone who is older. Newlyweds, new parents, divorcees, etc. will all want to consider having a will or revising their existing will.

If you would like to set up an estate plan, please give Hampton Law a call at 239.309.0090 to schedule an initial consultation.

Watch a short video as Attorney Blake Hampton details one of the most important differentiators when it comes to having a Last Will and Testament or a Revocable Trust.

Click to watch a short video of Attorney Blake Hampton explain why it’s crucial to have a Durable Power of Attorney.

Although we are all a bit worried and unsure at this time, some things cannot and should not be avoided or put off to a later time. Now more than ever is the time to make sure that your affairs are in order, your assets are protected, and you have peace of mind. Now more than ever is the time to plan for an emergency, in hopes that you’ll never be faced with that situation. If you don’t have a Durable Power of Attorney or a Health Care Surrogate, what would you do if you contracted COVID-19 and were unable to manage your finances or make your own health care decisions? When it comes to estate and long-term care planning, “the early bird gets the worm.” Planning only becomes more complex, time sensitive and expensive as time passes. Procrastinating these important decisions will guarantee two situations, a court will likely decide what is best for you and it will cost substantially more than proactively planning.

Who makes decisions for you when you cannot? There are two primary documents that can give an Agent of your choosing the power to make decisions for you when you’re incapacitated. The first is the Durable Power of Attorney and the second is the Health Care Surrogate. These processes do not  involve a court or public process.

Durable Power of Attorney is a document that delegates authority to one or more individuals to enter into or alter legal agreements and make financial decisions on your behalf. The individual, normally referred to as an “Agent” or “Attorney-In-Fact” should ideally be someone you’ve known for years, a person you trust and who is financially solvent. Typically, clients will choose a family member to take on this role.

The designation of Health Care Surrogate is a document that delegates authority to an “Agent” or “Surrogate” to make health care decisions on your behalf. For example, if you are unconscious or unable or speak for yourself, your physician would be able to confer with your surrogate in your stead. Therefore, it is important to communicate your concerns and wishes for treatment with your surrogate well in advance of a healthcare emergency.

Decisions regarding your health care are difficult to make. That’s what makes it so important to not wait until the last minute. In light of coronavirus, we are all trying to do our best- eating well, exercising, getting plenty of rest and maybe taking a few extra Vitamin C supplements. Hampton Law wants to help ensure that everyone stays healthy, but also has access to our services. We will be staying open during normal business hours in an effort to serve you during this critical time. In addition to in-office appointments, we can also host video conferencing or phone conferencing appointments for anyone who is practicing social distancing at this time. We’ve got you covered!

This time around, your neighbor is incorrect for a few reasons. Under most circumstances, you do not want to give assets away before your passing. In my experience in elder law, you never know how long you might need to draw on your assets for care, medical expenses, etc. You don’t want to be in a situation where you need additional finances and no longer have access to them. In addition, there is no inheritance tax in most of the United States, which means your children will not get taxed on any properties or assets you would bequeath to them.

There is a difference between gift tax rules and Medicaid gift rules. The gift tax is a tax on money you give away during your lifetime. However, you are allowed under IRS rules to give away at least $15,000.00 per individual without needing to use your exemption or file a IRS Form 709 Gift Tax Return. The current individual exemption is $11.58 million. Any amount over the exclusion amount must be reported and once your exemption amount is used up, any gifts beyond the exemption will be subject to the gift tax.

There are also income tax reasons why you would not want to give money to your children now.  If you give an asset away like real estate, the recipient of your gift will receive your tax cost basis (what you paid) for that asset. If your son or daughter receives the asset upon your passing, he or she will receive your date-of-death value in the asset. If your son or daughter sold the asset the day after your death, they would likely recognize no capital gains tax. As you can see, there are significant income tax benefits to waiting until your passing for assets to pass to your loved ones.

Unlike tax laws, Medicaid views gifting very differently. If you have limited financial resources or Medicaid eligibility is a concern, then you also don’t want to give assets away before end of life. Medicaid has a five year look back on impermissible transfers. In sum, Medicaid does not permit you to give money away to become eligible for the benefit. There are several exceptions to this rule, but you should consult with an attorney as even a minor failure in execution could cause negative consequences or even be considered fraud.

Not all gifting is bad (hello birthdays presents!), but you should consult with an experienced estate planning and elder law attorney prior to making any large gifts in order to minimize the risk of unintended consequences.

Depending on the circumstance, your neighbor may be correct. Not every life change warrants that you make updates to your will, but there are certain instances where you want to talk to your estate planning attorney to make sure your will is current. For instance, if you’ve lost a loved one, got married, or are recently divorced, then you most definitely want to update your last will, your trust (if you have one), your durable power of attorney and any other important legal documents in order to reflect these life changes.

Your last will, trust and beneficiary designations should always reflect a new spouse or remove a former one. An oversight of not updating your estate planning documents and beneficiary designations can result in unnecessary headaches later on for you and your heirs. Not only should you update your will and trust, but also review your durable power of attorney, health care surrogate and living will. Florida’s power of attorney laws were revised in October 2011, and your power of attorney may find themselves unable to exercise authority in order to take care of your finances if you haven’t updated this document after Oct. 2011.

Another important aspect to know, since we have many seniors who relocate to Florida from northern states, is that your documents may be valid, despite moving from one State to another.  Florida law provides that out of state documents are valid, so long as they were validly executed according to the State laws at that time.

Although I do recommend making sure that updates take place over time as your life changes, depending on the wording of your will or trust you may not need to update those documents every time. For example, if your will makes mention of your descendants, but not specific children by name, then your will may not need to be updated. However, it’s always a good idea to double check with your attorney. In fact, you should see a Florida licensed attorney every couple of years to review any changes in your life. They are the experts on whether your documents or beneficiary designations need to be revised.

The best thing to keep in mind, is that it’s always easier to make changes or updates to these documents prior to when you actually need them. It’s much harder to make changes once you’re already in a crisis. As the motto at Hampton Law goes, “Plan today, for peace of mind tomorrow.”

Planning for retirement and deciding whether to buy long-term care insurance would be a lot easier if you knew your odds of needing long-term care, as well as at what age and for how long. Unfortunately, there’s no definite answer. On the other hand, some statistics do provide a bit of guidance.

The Numbers

In 2012, there were about 1.2 million nursing home residents over 65 years old in the United States. Of these, 18 percent were 65 to 74 years old, 32 percent were between 75 and 84, 41 percent were between 85 and 94, and 9 percent were 95 or older. Of course, there are fewer of us in each age cohort, so the likelihood of needing nursing home care rises even more steeply with age than these percentages indicate. While these numbers do not reflect other types of long-term care, the need for home care, assisted living, or care provided by family members probably rises at similar rates.

According to the American Association for Long-Term Care Insurance, in 2012 64 percent of long-term care claims were made by those over age 80 and only 9 percent were from those in their 60s. Meanwhile, according to the association’s figures for 2008, 44 percent nursing home residents stay less than a year, 30 percent stay between one and three years, and only 24 percent spend more than three years in a facility. Updated numbers would likely indicate even shorter stays as more seniors receive care at home or in assisted living facilities. Those who move to nursing homes do so when they are older and sicker, meaning that they stay for a shorter period of time than in the past. According to one reported statistic, only 40 percent of seniors spend any time in a nursing home. 

Interpreting the Numbers

So, what do all of these statistics mean in terms of your planning? First, the odds are that you will not need care until you are at least 80 or 85. Second, if you do need nursing home care, there’s a 44 percent chance it will last less than a year (either because you will return home after a period of rehabilitation or you will not survive more than a year) and only a one-in-four chance that your stay will last three or more years. Of course, if it does, your costs will become prohibitive. However, since only 40 percent  of seniors spend any time in a nursing home and only a quarter of those stay longer than three years, this means that statistically you have only a one in 10 chance of needing more than three years of nursing home care.

Unfortunately, these statistics are somewhat dated and are just statistics. How do any of us know whether we are part of the 60 percent of seniors who will never enter a nursing home, the 30 percent who will spend less than three years there, or the 10 percent who will spend more than three years? We don’t, but we can modify the statistics based on our own circumstances, especially with respect to certain factors.

Key Factors

Family History: Did your parents live to a ripe old age with no cognitive impairment or become demented at 72, requiring continuing care for another 10 years? While we do not have our parents’ exact genes or live their same lifestyle, there are likely to be some similarities.

Health and Fitness: Do you have any illnesses or conditions that could lead to future impairments or are you in good health and take good care of yourself? Are you overweight or obese, which can lead to illness and disability? Of course, in terms of long-term care, health can cut in both directions. Bad health can lead to the need for care or it can cause an early death, eliminating the need for care. Good physical health can delay the need for care but in the event of cognitive challenges mean that you live a long time with impairments.

Family Situation: If you do need assistance in the future, do you have a spouse, children or other family members who could provide care? Or would you need to pay for it whether at home, in assisted living or in a nursing home?

We have statistics on the need for nursing home care because nursing homes are highly regulated. We know how many people are in them at any one time and how long they stay. We don’t know for sure how many seniors are receiving care at home or in assisted living facilities. But let’s assume for the sake of argument that for every person living in a nursing home, there’s another receiving care at home or in assisted living. Then we can assess the average likelihood of needing care as follows:

Then, you can adjust these numbers up or down based on your health, family history and family situation. For instance, if you are in excellent health, you might add 10 percentage points to the likelihood that you will not need any care, reducing the likelihood of needing 1 to 3 years or more than 3 years of care by 5 percentage points each. If, on the other hand, one of your parents needed a decade of care due to Alzheimer’s disease, you might add 5 percentage points each to the longer levels of care, taking 5 percent off of both the “no need” and the “less than one year” categories. Statistically, men are more likely to receive assistance from their wives, than women from their husbands, in large part because women live longer on average.

While this is far from perfect, by developing your own table you will have a better idea of how to protect yourself and your family’s finances should you require long-term care.  Your attorney can help with this planning, explaining your options and the steps that can be taken now to prevent financial devastation later.  

Most long-term care involves assisting with basic personal needs rather than providing medical care. The long-term care community measures personal needs by looking at whether an individual requires help with six basic activities that most people do every day without assistance, called activities of daily living (ADLs). ADLs are important to understand because they are used to gauge an individual’s level of functioning, which in turn determines whether the individual qualifies for assistance like Medicaid or has triggered long-term care insurance coverage.   

The six ADLs are generally recognized as:

• Bathing. The ability to clean oneself and perform grooming activities like shaving and brushing teeth.  
• Dressing. The ability to get dressed by oneself without struggling with buttons and zippers.
• Eating. The ability to feed oneself.
• Transferring. Being able to either walk or move oneself from a bed to a wheelchair and back again.
• Toileting. The ability to get on and off the toilet.
• Continence. The ability to control one’s bladder and bowel functions.

There are other more complicated tasks that are important to living independently, but aren’t necessarily required on a daily basis. These are called instrumental activities of daily living (IADLs) and include the following:

• Using a telephone
• Managing medications
• Preparing meals
• Housekeeping
• Managing personal finances
• Shopping for groceries or clothes
• Accessing transportation
• Caring for pets

Long-term care providers use ADLs and IADLs as a measure of whether assistance is required and how much assistance is needed. In order to qualify for Medicaid nursing home benefits, the state may do an assessment to verify that an applicant needs assistance with ADLs. Other state assistance programs also may require that an applicant be unable to perform a certain number of ADLs before qualifying. In addition, long-term care insurance usually uses the inability to perform two or more ADLs as a trigger to begin paying on the policy.  

What Is a Living Trust?

A living trust is a legal arrangement that’s established to hold and manage your assets. Living trusts take effect while you are still alive, as opposed to a trust that is established through a will and takes effect after your death.

Living trusts generally involve three main parties:

• The grantor is the person who creates the trust and transfers their assets into it.
• The trustee is the person appointed by the grantor to manage and administer the trust according to its terms. In a living trust, the grantor typically serves as the first trustee and appoints a second trustee to succeed them after their death.
• The beneficiaries are the people who are designated to receive the assets held in the trust according to the trust’s terms and instructions.

Types of Trusts

There are two different kinds of living trusts:

Revocable Trusts

A revocable trust can be modified, amended, or revoked by the grantor during their lifetime. The grantor retains control over the assets in the trust and has the ability to make changes to the trust’s terms and beneficiaries or even dissolve the trust entirely.

Irrevocable Trusts

An irrevocable trust is a trust that, once created, cannot be modified, amended, or revoked by the grantor.

Benefits of Putting Your House in a Living Trust

Including your house in a living trust has numerous advantages:

1. Avoid Probate

Assets held in a living trust typically pass directly to the beneficiaries you’ve designated in the trust document, bypassing the need for probate court proceedings. Probate can be a time-consuming and costly process, so avoiding it can save your loved ones from unnecessary hassle and expenses.

2. Protect Privacy

Unlike a will, which becomes public record during probate, a living trust allows for a higher level of privacy. The distribution of your assets and the terms of the trust can remain confidential since it does not go through the probate process.

3. Retain Control

A living trust allows you to establish detailed instructions for the management and distribution of your assets. It also provides a mechanism for managing your assets in the event of your incapacity. If you become unable to manage your affairs before your death, the successor trustee you’ve designated can step in to manage the trust without court intervention.

4. Potential Tax Benefits

A living trust can be a useful tool for implementing tax planning strategies for larger estates that are subject to estate taxes. While estate tax laws vary depending on the jurisdiction, certain provisions within a living trust may help reduce the tax burden on your estate.

How to Find an Estate Planning Attorney in Fort Myers

Hampton Law offers estate planning services to several locations in Southwest Florida, including Fort Myers, North Fort Myers, Cape Coral, Bonita Springs, Estero, and Sanibel.

Estate planning can be an overwhelming process. At Hampton Law in Fort Myers, our attorneys work with you directly to help you structure your estate and ensure the safe transfer of your assets.

Here at Hampton Law, we keep our clients in-the-know when it comes to important things like a living trust. Learn about what exactly a living trust is and why you need one for estate planning in Fort Myers.

What is a Living Trust?

When we talk about a living trust, we’re referencing a revocable living trust. This kind of trust can be edited or completely revoked by the trustor as long as they are living and competent.

Once the trust is created, all of your assets, including your home, stocks, bank accounts, and more are transferred into it. During your lifetime, the trust is administered for your benefit. When you die, the assets will be transferred to the beneficiaries that you’ve designated in the trust documents.

Do I Need a Living Trust?

Having a living trust is important for any and everyone. In the event of an accident or sudden illness, it will eliminate any unsureness or confusion. It will ensure that your assets are managed in the way you want, and allotted to the designated beneficiaries.

If you and your spouse own a home or have children, you can benefit from a living trust because your assets and heirs can avoid a time-consuming and expensive experience in probate court.

The asset that your living trust holds can be managed by the trustee and distributed according to your wishes without the courts ever becoming involved, or even supervising the process.

Avoiding Probate

If assets under your name are not included in a living trust when you pass away, or they don’t pass ‘beneficiary designation,’ and they surpass a certain amount of value, those assets could be subject to probate. Probate is a process supervised by the court that handles transferring assets to beneficiaries listed in a person’s will.

After the event of your death, a petition is filed with the court and a hearing is held. The process concludes when the court approves a final distribution of your assets. Probate takes much more time than property distribution related to a living trust, and assets may get tied up in probate in a manner they wouldn’t in a living trust.

A Living Trust Attorney Near Me

Estate planning in Fort Myers is important. Hampton Law specializes in estate planning and elder law, and we would be more than happy to help you figure out your living trust. Contact us today to get the ball rolling.

Losing your original estate plan documents certainly is an issue, but not an unsolvable dilemma. The first thing you should do is contact your estate planning attorney and see if they saved electronic copies of any or all your documents. (At Hampton Law, we scan all our clients’ documents on the day of signing, so that we can easily email them to you upon request.) However, not all law firms do this.

Other than re-signing your documents, Florida law provides several options for addressing the issue of missing or damaged original estate plan documents.

According to Florida Probate law an original Last Will and Testament needs to be submitted to the court upon death. Therefore, the Last Will and Testament is the one document Hampton Law recommends re-executing as soon as possible.

An electronic copy of a Trust document should be sufficient for any purpose. If you have electronic copies, you should be okay to use these. Otherwise, you’re welcome to have an attorney restate the Trust in its entirety so that you have a hard copy. Because you’re simply restating the Trust, you can also continue to use the original Trust date.

The Durable Power of Attorney is the most important document you have, and Florida law provides that an electronic copy has the same effect as a physical copy. A Designation of Healthcare Surrogate (sometimes called a Healthcare Proxy) and a Living Will should also be fine in electronic copy form.

If you choose to use a copy of the Durable Power of Attorney or Health Care Surrogate, I suggest a notary public from the law firm that drafted your estate plan documents sign a Certification as Notary Public that the document is a true and exact copy of the original.

Before utilizing a copy of your estate plan documents, always consult with your attorney to make sure that these will be valid and accepted according to Florida Law when needed.

There’s more that goes into estate planning in Florida than just a Last Will and Testament. Keep reading to learn about the nine most common documents in an estate plan.

The Documents and Their Purpose

1. Last Will and Testament

While your last will and testament isn’t the only document you’ll need, it is commonly the one people think of first. This document names the executor of your estate, your beneficiaries, final wishes, along with what assets and possessions you’d like to leave to family members, friends, or charities.

2. Preneed Guardian Designation

A preneed guardian designation appoints someone to act on your behalf if your durable power of attorney and healthcare surrogate should fail. At Hampton Law, we build this into the durable power of attorney, to save you from having separate documents.

3. Durable Power of Attorney

A durable power of attorney is perhaps the most important document in an estate plan. Careful consideration should be made before naming your durable power of attorney. This is the person that would need to make financial decisions on your behalf if you are unable to make them on your own. The duties of a power of attorney could include; paying your bills and mortgage, selling your homestead, and managing investments.

4. Advance Healthcare Directives

Advance healthcare directives provide your proxies and physicians with your preferences for medical care if you are unable to make those decisions yourself. Advance directives is an umbrella term for the following documents; HIPAA, living will and healthcare surrogate, which is sometimes called a healthcare proxy.

5. Revocable Living Trust

A living trust is an alternative to a last will and testament. A revocable trust is an agreement that is revocable and amendable while you are alive and have capacity. The document typically names you and/or your spouse as beneficiaries during your lifetime and then names beneficiaries upon your passing. Revocable Trusts are primarily used for income and estate tax planning, ease of administration, addressing assets in multiple states, and are helpful in avoiding probate.

6. Letter of Instructions

If it’s not already addressed in your last will and testament, the letter of instructions details your desires for your funeral arrangements. Even if you already have a pre-paid burial or cremation contract, you should provide some additional guidance to the person you nominate as executor/personal representative as to how you’d like your funeral service or celebration of life to play out.

7. List of Important Documents

Creating a list of the important documents that your executor or trustee needs to settle your affairs is ideal. This makes it easier for your loved ones to carry out your final wishes. At Hampton Law, we provide our clients with a binder of their original documents for safekeeping. In addition, we’re happy to email digital copies to all beneficiaries, trustees and/or the executor so that they also have copies of your estate plan.

8. Provision of Digital Assets

In this digital age, including a provision for your digital assets is essential. Such assets can include:

• Website domain names
• Photos and videos stored electronically
• Social media accounts
• Emails
• Crypto currency wallets

Your Florida Estate Plan

Everyone, at some point in their life should have an estate plan in place. Although facing our own mortality isn’t always easy, having a plan in place gives peace of mind and confidence that your wishes will be carried out the way you want. If it’s time to put your affairs in order, Contact Hampton Law today to get started.

Did you know that August is National Make-A-Will Month? Although most Americans recognize the importance of estate planning, it is estimated that 50-60 percent do not have a will. If you do not yet have an estate plan, now is the time to act!  Remember that even if you set up a revocable trust as part of your estate plan, you still need a will.

Why is it Important? 
The entertainer known as Prince, or the Artist formerly known as Prince, died at the age of 57. Since he did not establish an estate plan before he passed, there was no decision or designation as to how is fortune should be divided. Prince’s estate is still tied up in legal battles five years later!  Not having a will can lead to family disputes, costly litigation and legal fees. Having your final documents in order before it’s too late is an expression of love and compassion for your family and friends. Don’t we keep reminding you to ‘Plan Now for Peace of Mind Tomorrow’?

Think Estate Planning is Only for the Wealthy?
A person’s wealth or assets will determine how detailed their estate plans may need to be, but everyone should have a plan in place. From selecting guardians for your children or who will act as the executor of your will, to who will inherit your most treasured items, a will is an important document that stipulates your desires upon your passing. Without it, your preferences are unknown and may not play out the way that you’d want them to. Think of a will like a genie in a bottle, making sure your wishes come true.

Most people cite not having time, not wanting to think about it, or simply not getting around to it as reason for not having a will.  With this month being National Make-A-Will Month, there is no better time to act than now.　　　

Regular Revisions
If you already have a will – congratulations! You are better prepared than more than half of Americans. While estate plans never expire, we know that life happens – births, marriages, deaths, and other important family changes. Everyone should review their will annually and make necessary revisions. This is also why a will isn’t just for someone who is older. Newlyweds, new parents, divorcees, etc. will all want to consider having a will or revising their existing will.

If you would like to set up an estate plan, please give Hampton Law a call at 239.309.0090 to schedule an initial consultation.

The Senate Democrats proposal for a $3.5 trillion spending plan includes expanding Medicare to provide dental, vision, and hearing benefits. The proposal is now being negotiated in Congress. 

Currently Medicare does not offer much in the way of dental, vision, and hearing benefits. Medicare Part A will cover certain emergency or necessary procedures that are received in the hospital. For example, if you are hospitalized after an accident and require jaw reconstruction, Medicare Part A will pay for the dental work required as part of that procedure. 

Medicare Part B offers very limited coverage of some vision and hearing services. For example, while Medicare Part B won’t cover routine eye exams, it does cover yearly glaucoma screenings for people at high risk and cataract surgery, among a few other limited exceptions. Part B will also cover some diagnostic hearing and balance exams if they are ordered by a doctor, but it will not cover routine hearing exams or hearing aids. There is no coverage at all for routine dental work.

Many people choose Medicare Advantage plans, which are run by private insurers, instead of traditional Medicare because it is possible to get some dental, vision, and hearing benefits in most plans. According to the Kaiser Family Foundation, 79 percent of people in Medicare Advantage plans have vision coverage, 74 percent have dental coverage, and 72 percent have hearing aid coverage. 

Under the Democrats’ proposal, Medicare beneficiaries would be able to receive dental, vision, and health benefits through traditional Medicare. The exact details of the proposal are unknown, but in a 2019 bill that passed the House, Medicare beneficiaries would have paid 20 percent of the cost for basic dental coverage and routine eye and hearing exams. Democrats want to pass the spending bill through the reconciliation process, which requires all 50 Democrats to agree to the plan. Negotiations are currently underway to craft a bill that has the support of all the Democratic senators.

For more information about the Democrats’ proposal, click here.

Britney Spears’s legal fight to wrest back control over her personal and financial affairs has flooded the issue of guardianship in Klieg lights. While a full guardianship may be necessary for many individuals who are incapable of managing their own affairs due to dementia or intellectual, developmental or mental health disabilities, the Spears case underlines the option of more limited alternatives.

Every adult is assumed to be capable of making his or her own decisions unless a court determines otherwise. If an adult becomes incapable of making responsible decisions, the court will appoint a substitute decision maker, usually called a “guardian” or a “conservator,” depending on the state.

Guardianship is a legal relationship between a competent adult (the “guardian”) and a person who because of incapacity is no longer able to take care of his or her own affairs (the “ward”). The guardian can be authorized to make legal, financial, and health care decisions for the ward. The National Center for State Courts says that about 1.3 million adults are living under guardianships or conservatorships with some $50 billion in assets.

The standard under which a person is deemed to require a guardian differs from state to state, and because guardianships are subject to state law, data on them is hard to collect and protections against abuse vary widely.  Netflix’s popular movie, I Care a Lot, spotlighted some weaknesses in the guardianship system that make it possible for an unscrupulous guardian to take control of an elderly person’s life and bleed their resources dry. 

The Spears Case: An Unusual Situation

Britney Spears has been under a court-ordered conservatorship that has controlled her career and finances since 2008. Her father, Jamie Spears, was appointed her temporary conservator when the pop singer was allegedly struggling with mental health issues and had been hospitalized, and a Los Angeles court later made the conservatorship permanent.

On July 14, a Los Angeles judge approved the resignation of Spears’s court-appointed lawyer and granted her request to hire her own lawyer. The 39-year-old singer told the judge that she wants to end the long-running conservatorship that put her father in charge of her estimated $60 million fortune and business affairs, and others in control of such personal decisions as whether she can marry and have a baby. “I'm here to get rid of my dad and charge him with conservatorship abuse,” she said.

Whatever the merits of this controversial case, what makes Spears's situation so unusual is the fact that she does not appear to be incompetent, at least when it comes to her professional accomplishments. In the 13 years since the conservatorship was put in place, she has continued her career as a pop star, earning millions from a four-year concert residency act in Las Vegas and serving as a judge on the television reality show “The X Factor.”

Another anomaly is the fact that until now Spears was represented by a court-appointed attorney who, she argued, did not represent her wishes or interests. However, while the media has given wide coverage to Spears’s side of the dispute, we have heard almost nothing from the professionals handling her affairs, who are constrained from publicly disclosing confidential information.

It’s easy to see why conservatorship, which takes away a person’s right to make decisions about significant aspects of his own life, is considered among the most restrictive legal remedies in the American judicial system. For this reason, courts are legally required to seek alternatives that will safeguard the ward’s finances and wellbeing but with the fewest restrictions, in an effort to protect that person’s rights.

Protections Without Total Loss of Control

In the case of an elderly person who may no longer be able to handle some or all of her own affairs, there are various approaches that provide protection without stripping that person of control over all decisions, as in Spears’s case.

Many people in need of help can make responsible decisions in some areas of their lives but not others (such as making major financial decisions). Families might consider setting up what’s called a “limited guardianship.” Most states allow judges to appoint guardians with limited powers that are specifically tailored to the alleged incapacitated person's needs. For example, a court can appoint a guardian to oversee a person's housing and health care, but not to manage the person's bathing, eating, and socialization. Conservators can be appointed to handle the financial affairs of someone who is not good with money, without having any power to manage health care decision making—the options are almost infinite.

Alternatives to Guardianship

Sometimes, guardianship isn't the answer at all. If a person can execute estate planning documents, she can also sign a durable power of attorney and a health care proxy, which allows someone to assist her with decisions without court involvement. This is important for several reasons. First, it prevents a court from ruling that someone is “incapacitated,” which carries with it a stigma and can be hard to undo, as Britney Spears is finding. Second, it puts the person in the driver's seat. Third, it is much less expensive and time-consuming. Another option is a revocable or “living” trust that can be set up to hold an older person's assets, with a relative, friend or financial institution serving as trustee. Alternatively, the older person can be a co-trustee of the trust with another individual who will take over the duties of trustee should the older person become incapacitated.

Experts say that Britney Spears faces a long, difficult path if she seeks to terminate her conservatorship. She would need to file a formal petition, which would require presenting evidence in hearings and depositions. She could face objections at every stage from attorneys representing her father and others involved in her care. (Spears has indicated her unwillingness to submit to a mental evaluation or test in her effort to end the conservatorship.)

If you have questions about what type of guardianship may be right for your family member, or if you are currently under guardianship and are looking to gain control of your affairs, talk to your elder law attorney today.

For an article on what may lie ahead in the Britney Spears case, click here.

For an article on how guardianships can lead to abuse by University of Virginia Family Law Professor Naomi Cahn, click here.

For more on guardianship, click here.

Most people want to pass their assets to their children or grandchildren, but naming a minor as a beneficiary can have unintended consequences. It is important to make a plan that doesn’t involve leaving assets directly to a minor.  

There are two main problems with naming a minor as the beneficiary of your estate plan, life insurance policy, or retirement account. The first is that a large sum of money cannot be left directly to a minor. Instead, a court will likely have to appoint a conservator to hold and manage the money. The court proceedings will cost your estate, and the conservator may not be someone you want to oversee your children’s money. Depending on the state, the conservator may have to file annual accountings with the court, generating more costs and fees.

The other problem with naming a minor as a beneficiary is that the minor will be entitled to the funds from the conservator when he or she reaches age 18 or 21, depending on state law. There are no limitations on what the money can be used for, so while you may have wanted the money to go toward college or a down payment on a house, the child may have other ideas. 

The way to get around these problems is to create a trust and name the minor as beneficiary of the trust. A trust ensures that the funds are protected by the trustee until a time when it makes sense to distribute them. Trusts are also flexible in terms of how they are drafted. The trust can state any number of specifics on who receives property and when, including allowing you to distribute the funds at a specific age or based on a specific event, such as graduating from college. You can also spread out distributions over time to children and grandchildren. 

If you do create a trust, remember to name the trust as beneficiary of any life insurance or retirement plans. If you forget to take that step, the money will be distributed directly to the minor, negating the work of creating the trust. 

To create a trust, consult with your attorney. To find an attorney near you, click here.  

For more information about beneficiary choices, click here.

This is a difficult question and one reason to avoid joint accounts. While joint accounts permit the joint owner to manage financial affairs for the original owner, they also remain the joint owner’s property when the original owner passes away. However, in many cases it’s recognized that the purpose of the joint ownership was to facilitate billpaying and financial management and not as an estate planning measure. In those cases, the joint owner usually cooperates and adds the account to the estate to be distributed in accordance with the deceased person’s expressed wishes. Where that doesn’t happen, you have the matter of proof. Unfortunately for you and the other grandchildren, the burden of proof is probably on you to prove your grandfather’s intent was not to benefit the other family member.

You have the added complication that the joint owner is also executor. She has a clear conflict of interest. As executor, she has a fiduciary duty to act in the best interests of the beneficiaries under your grandfather’s will. Acting in your best interest would be to include the joint account in your grandfather’s estate to be distributed to his grandchildren. While it’s not clear whether an independent executor would be successful in that regard, it’s difficult to see how the family member can act as executor if she is insisting the joint account is hers.

Studies have found that workers overestimate how much they will receive in Social Security benefits when they retire. Having a good understanding of the realities can help you plan for retirement. 

Researchers from the University of Michigan studied the expectations of workers and found great uncertainty about future Social Security benefits as well as a tendency to overestimate the amount they think they will receive. Half of the workers surveyed in the study did not know their benefit amount. The average overestimation of the benefit was $307 a month, more than one-quarter of the average forecasted benefit. 

The study found that as workers got older, however, they were more likely to understand their benefits and less likely to overestimate benefit amounts. 

Nationwide Retirement Institute’s annual Social Security survey similarly found that future retirees over age 50 expect to receive a higher payment than what actual retirees receive.  In this survey, respondents were off by nearly $200 a month. And almost 70 percent of Baby Boomers mistakenly believe that if they claim Social Security early, their benefit will go up automatically when they reach full retirement age. Not surprisingly, the Nationwide survey also found that more than half of workers are not confident in their understanding Social Security or how much money they will receive. 

Not understanding how much you will get from Social Security could lead to you to save less money for retirement while you are working. Setting aside money in a retirement account early can lead to big dividends later. The University of Michigan study found that spending and saving choices based on incorrect expectations lead to less ability to spend in retirement. 

Confusion about benefits could also cause you to start taking benefits before you should. Both the University of Michigan study and the Nationwide survey found that workers have misconceptions about claiming Social Security benefits early. Many people do not understand that if they take Social Security benefits early, it will permanently reduce their benefits. 

Individuals who file for Social Security benefits at age 62 – before their full retirement age — will receive around 72 percent of their full benefit. On the other hand, if you delay taking Social Security benefits beyond your full retirement age your benefit will increase by 8 percent for every year that you delay, in addition to any cost-of-living increases, up to age 70.

For those retiring in 2021 at their full retirement age, the average monthly Social Security benefit is $1,543 for an individual and $2,596 for a couple who both receive benefits, meaning that many will receive less than this amount based on their work and earnings history. The maximum monthly Social Security benefit that an individual can receive in 2021 is $3,895 if they wait until age 70 to collect.  And keep in mind that many retirees have their Medicare Part B and Part D premiums deducted from their Social Security checks.

To gain a solid understanding of your expected Social Security benefits, you can create a my Social Security account. The account will give you retirement benefit estimates based on what you are currently earning. 

For more information about Social Security, click here.

While the current estate tax exemption is quite high, a closely held family business may put your estate over the limit. Careful planning is necessary to lower or completely avoid the tax, and minority valuation discounts are one strategy.

Families that want to pass on their business may run into the estate tax. Estates valued at more than $11.7 million (in 2021) are subject to federal estate taxation. If you decide to give your business away before you die, you need to consider the gift tax. The lifetime federal gift tax exclusion – the amount you can give away without incurring a tax – is also $11.7 million (in 2021). You can also give any number of other people $15,000 each per year (in 2021) without the gifts counting against the lifetime limit. 

One estate planning strategy for reducing estate taxes is to gift some or all of a company’s ownership to your children. When you transfer a minority interest in a company, that stake is not as valuable because the minority owner doesn’t have the right to make all the decisions or vote on important issues relevant to the company. This is called a “minority discount.” So, for example, if a company is worth $10 million, a 10 percent interest in the company would be discounted to less than $1 million. The amount of the discount depends on each individual case, but usually ranges between 10 to 40 percent of the undiscounted value. 

By using discounts, you can reduce the value of your company for estate tax purposes while at the same time gift your children a percentage of the company at a reduced rate. These discounts apply even if everyone who owns a stake in the company is a family member. 

In 2016, federal regulations were introduced to eliminate this type of discounting. The regulations were withdrawn in 2017, but under the new administration it is possible that they will come back. 

To find out if a minority valuation discount is the right strategy for your family business, contact your attorney. To find an attorney near you, click here.

A trust is a legal arrangement through which one person (or an institution, such as a bank or law firm), called a “trustee,” holds legal title to property for another person, called a “beneficiary.”

Trusts fall into two basic categories: testamentary and inter vivos.

A testamentary trust is one created by your will, and it does not come into existence until you die. In contrast, an inter vivos trust, starts during your lifetime. You create it now and it exists during your life.

There are two kinds of inter vivos trusts: revocable and irrevocable.

Revocable Trusts

Revocable trusts are often referred to as “living” trusts. With a revocable trust, the person who created the trust, called the “grantor” or “donor,” maintains complete control over the trust and may amend, revoke or terminate the trust at any time. This means that you, the donor, can take back the funds you put in the trust or change the trust's terms. Thus, the donor is able to reap the benefits of the trust arrangement while maintaining the ability to change the trust at any time prior to death.

Revocable trusts are generally used for the following purposes:

1. Asset management. They permit the named trustee to administer and invest the trust property for the benefit of one or more beneficiaries.
2. Probate avoidance. At the death of the trust grantor, the trust property passes to whoever is named in the trust. It does not come under the jurisdiction of the probate court and its distribution need not be held up by the probate process. However, the property of a revocable trust will be included in the grantor's estate for tax purposes.
3. Tax planning. While the assets of a revocable trust will be included in the grantor's taxable estate, the trust can be drafted so that the assets will not be included in the estates of the beneficiaries, thus avoiding taxes when the beneficiaries die.

Irrevocable Trusts

An irrevocable trust cannot be changed or amended by the grantor. Any property placed into the trust may only be distributed by the trustee as provided for in the trust document itself. For instance, the grantor may set up a trust under which he or she will receive income earned on the trust property, but that bars access to the trust principal. This type of irrevocable trust is a popular tool for Medicaid planning.

Testamentary Trusts

As noted above, a testamentary trust is a trust created by a will. Such a trust has no power or effect until the will of the grantor is probated. Although a testamentary trust will not avoid the need for probate and will become a public document as it is a part of the will, it can be useful in accomplishing other estate planning goals. For instance, the testamentary trust can be used to reduce estate taxes on the death of a spouse or to provide for the care of a disabled child.

Supplemental Needs Trusts

The purpose of a supplemental needs trust is to enable the donor to provide for the continuing care of a disabled spouse, child, relative or friend. The beneficiary of a well-drafted supplemental needs trust will have access to the trust assets for purposes other than those provided by public benefits programs. In this way, the beneficiary will not lose eligibility for benefits such as Supplemental Security Income, Medicaid and low-income housing. A supplemental needs trust can be created by the grantor during life or be part of a will.

Credit Shelter Trusts

Credit shelter trusts are a way to take full advantage of state and federal estate tax exemptions.

One of the greatest fears of older Americans is that they may end up in a nursing home. This not only means a great loss of personal autonomy, but also a tremendous financial price. Careful planning can help ease the financial burden.

Depending on location and level of care, nursing homes cost between $40,000 and $180,000 a year. Most people end up paying for nursing home care out of their savings until they run out. Then they can qualify for Medicaid to pick up the cost. The advantages of paying privately are that you are more likely to gain entrance to a better quality facility and doing so eliminates or postpones dealing with your state's welfare bureaucracy–an often demeaning and time-consuming process. The disadvantage is that it's expensive.

Careful planning, whether in advance or in response to an unanticipated need for care, can help protect your estate, whether for your spouse or for your children. This can be done by purchasing long-term care insurance or by making sure you receive the benefits to which you are entitled under the Medicare and Medicaid programs. Veterans may also seek benefits from the Veterans Administration.

Those who are not in immediate need of long-term care may have the luxury of distributing or protecting their assets in advance. This way, when they do need long-term care, they will quickly qualify for Medicaid benefits. Every case is different. Some have more savings or income than others. Some are married, others are single. Some have family support, others do not. Some own their own homes, some rent. Still, there are a number of basic strategies and tools that are typically used in Medicaid planning. To start planning now, contact your attorney. 

The U.S. Supreme Court has agreed to hear a case disputing how much states can recoup from Medicaid recipients’ settlements in personal injury cases. The decision has the potential to affect anyone who receives government assistance with their medical care following a disabling injury that results in a lawsuit.  

If you are injured due to another person's negligence and you receive care through your state's Medicaid program, the state has a legal right to recover funds it spent on your care from your personal injury settlement or award. The question is, how much of the settlement or award is the state entitled to, versus how much may you keep to help compensate for your injury and maintain your quality of life?

Here are the facts of the case the High Court will decide: In 2008, a truck struck and seriously injured 13-year-old Gianinna Gallardo in Florida. The state’s Medicaid agency provided $862,688.77 in medical payments on Gianinna's behalf. Her parents sued the parities responsible, and the case eventually settled for $800,000, of which $35,367.52 represented payment for past medical expenses. The settlement also included funds for future medical expenses, lost wages, and other damages. 

Under the formula used by the state to calculate reimbursement, the Medicaid agency claimed it was entitled to $323,508.29 in medical payments from Gianinna's settlement. The state’s formula included money in the settlement that was specifically allocated for future medical expenses. 

Gianinna’s parents sued the state Medicaid agency in federal court, arguing that Florida’s reimbursement formula violates federal law because the state should only be able to recover from that portion of her settlement allocated to past medical expenses. The Medicaid agency countered that it was entitled to satisfy its lien from the portion of the settlement representing compensation for both past and future medical expenses. 

When a U.S. district court ruled in favor of Gianinna, the Medicaid agency appealed. The U.S. Court of Appeals for the 11th Circuit reversed the lower court’s decision, ruling that federal law does not “prohibit the agency from seeking reimbursement from settlement monies for medical care allocated to future care.” (Gallardo v. Dudek, 11th Cir., No. 17-13693, June 26, 2020) The 11th Circuit’s decision in Gallardo directly conflicts with a 2018 decision by the Florida Supreme Court that decided that federal Medicaid law preempts Florida law and requires that the state only seek reimbursement from settlement amounts attributable to past medical expenses. Other state and federal courts have also differed on this question. 

The U.S. Supreme Court has agreed to hear the case to resolve the dispute among the lower courts. The decision will likely come during the Court’s 2021-2022 term. 

That is a difficult one. It would be helpful for them to sign an agreement that requires them to move out when necessary and that gives someone else the ability to make the determination of when it becomes necessary. The problem, of course, is what will you do if they refuse to move? At least you will have a better argument with the agreement in place ahead of time than without an agreement at all. It’s also important for your mother to give you her durable power of attorney or to place the house in trust so you have the legal authority to evict your siblings if it comes to that.